Demographic change: it’s a trend that probably isn’t talked about enough but over the medium to long-term will have a huge impact on the UK economy and therefore commercial real estate.
Hospitality Investor recently caught up with James Pomeroy global economist at HSBC to discuss a range of topics, including: climate change, consumer confidence and the broader outlook.
Below are a selection of highlights, to watch the interview, please click on the above image.
On the long-term trajectory for the UK
JP: Now you think about the aging of the UK population, you think about the change in the working age population, you think about all of these things, they start looking much, much worse over the medium term for the UK, and that should hold back growth.
On the impact on real estate investment
JP: [That] slower growth that aging demographic could play a key role in pulling down interest rates.
On the impact on consumer spending
JP: [One] thing we're seeing both in the near term, and in the long term is a sort of shift in consumer preferences. And people really, really valuing experiences, people really, really valuing anything to do with having fun, and there's a whole load of structural reasons why those things are gonna get to continue...
On the impact from climate change
JP: [When] you think about the economic shock, we have to get a little bit more nervous, because a lot of these climate shocks that we're seeing their high temperatures, much more prevalence of extreme weather events, then likely to hurt the economy in so many ways. Some of that comes from uncertainty, some of it comes from investment being down, somebody comes to insurance cost.